Covid-19 crisis: Govt allows PPE exports after prices crash over 65%

India opened up exports of personal protective equipment (PPE) or medical coveralls, albeit in a restricted manner, as supplies in the domestic market have picked up significantly, leading to a price crash. 

Prices of some grades of PPE have crashed by over 65 per cent in the last one and a half months owing to glut in the domestic market. 

The Directorate General of Foreign Trade (DGFT) in a notification on Monday said it is revising the export policy for medical coveralls to 'restricted' from 'prohibited'. The government has set an export quota of 5 million PPE every month. 

The industry seemed divided in its reaction to the relaxation in export policy. 

Kulin Lalbhai, executive director, Arvind, said, “This is a great move by the government. Arvind has maintained earlier that India has an opportunity to become a leading player in technical textiles, including PPE. The Centre has allowed the first step into exports. The industry will now have to prepare itself for the same." 

As for Arvind, Lalbhai said it is working on getting requisite certificates and it hopes to be ready with all certification for exports in July. "The demand situation is very conducive. We see no reason why we should not ramp up (PPE) manufacturing. We can provide world-class quality," said Lalbhai. 

Meanwhile, Rajiv Nath, forum coordinator of the Association of Indian Medical Device Industry (AiMeD), an umbrella organisation for all medical device makers in India, felt the process of exports is not smooth. He added that manufacturers and exporters of PPE will have to apply online through DGFT's export authorisations. Applications received within the first and third day of the month will be considered for the quota of that month. The validity of export licence would be for three months only. 

Meanwhile, prices have crashed in the domestic market. "A rough estimate is that around 500,000 PPE are being manufactured in India per day by small enterprises," said Nath. 

There are different grades of PPE - prices for the basic variety have come down to less than Rs 150 per piece, from over Rs 500-600 a month ago. 

The director of a diagnostic chain said he gets calls from suppliers almost daily. He said they  quote a price of Rs 200 and are willing to negotiate. "We get calls daily and the negotiated rates come down to Rs 150. Some, however, do not provide gloves and goggles at this rate. We bought for around Rs 450 a piece (as part of a bulk order) in May. We have enough stock now, and have not placed any purchase order yet," he said. 

Lalbhai maintained that the price slash in the domestic market is not a concern.  "There are different players operating in different quality bands. It is not fair to say that prices have slashed overall. For a quality product, there is a certain cost to make it and a certain demand for it - whether in domestic or exports," he added.